The truth of the matter is that we need cash injection every once in a while when we are in some sort of financial quagmire. Short term loans have been quite instrumental in helping people from different walks of life meet some sort of emergency at short notice. Add to that the fact that people don’t like being tied to a loan burden for a couple of years and you immediately get the sense why short term loans are very popular in the United Kingdom. There is always a sense of optimism and surety when it comes to applying for short term loans something that long term loans don’t offer. So what are some of the merits/benefits/advantage of short terms loans? What is it that has made these kinds of loan instruments very popular?
Access to money quickly
If there is something that has elevated the popularity of short term loans it has to do with the fact that they offer applicants access to quick money. Unlike long term loans, you can get access to money within a couple of hours and use it for whatever emergency you have. In a nutshell, if you need money in the shortest time possible without going through the lengthy process of application, then short term loans are for you.
You don’t need to pledge security
The good thing about majority of short term loans is that you can get access to credit without having to pledge any of your assets as security as it is the case with long term loans. There is no risk to any of your assets which makes short term loans quite attractive.
Credit checks are not a thorn in the flesh
While long term loans place great emphasis on a person’s credit score, the same cannot be said of short term loans. In fact, a great deal of short term loans do not place great emphasis on a person’s credit rating which essentially means that many get to qualify for these kinds of loans. So long as you are in employment, can provide proof of income, a legal citizen of UK and a person of legal age, you are good to go and get approved for a short term loan.
The repayment terms for short term loans are quite flexible. You can always go for one in which the terms are favorable to you. For instance, you can choose to pay the interests on your loan and pay the outstanding principle amount at a later date or simply choose to extend your loan upon its maturity. This flexibility is what has made short term loans very popular.
Short term commitment
The repulsive aspect about long term loans is that one has to be committed for an inordinately long period of time. One also has to deal with the burden of monthly installments over a couple of years which is never the case with short term loans as a person only has to be committed anywhere between 1 and 12 months. While v5 loans can extend over one year, it depends on the amount of money you have been advanced. You can always pay it within a few weeks if you are capable.
To sum it up, while there are many benefits associated with short term loans, there are also a number of drawbacks. The interest rates associated with these kinds of loans are relatively high and there are instances where a person has to pay twice the principal amount of money. Some people also get into the debt rut as a result of poor management of money.